Thoughts on Real Estate- bubble burst or not?
- Thread starter Cobra1776
- Start date
I took the cash and ran. We built for $770k in 2016, sold for $1.6 million a few months ago. Moved 25 miles further out, paid cash and banked a bunch. Best thing we ever did.
If the rental market is good in the area, consider keeping it and having someone else pay your mortgage. Get a second house and make that your primary residence. IF you are or were military, get your VA certificate of eligibility back (re-fi to conventional) then buy with zero down. If you weren’t ever active duty, consider a refi to pull equity out for the down payment of the next place. Good luck either way - keep us posted.
Phoenix is still a growing area. I built in a new master planned community in the west valley in 2012 and my home is up 2.5 times original value. Values continue to rise.
I think there will always be hot spots for housing.
I wouldn’t be worried about a bubble. If the dollar tanks, everything goes with it.
Being a landlord didn't work out for a lot of people the past two years with covid. I contemplated it but am shying away from it. As a vet, can you buy another home while you still own one?
OP: I'm relocating next summer. I thought about selling now and then renting till I leave next year but I don't want to have to move twice in six months. Moving is a huge pain. Besides, rents here in Vegas are through the roof.
Phoenix has to worry about water supply next.
One would think so and its been in the back of my mind as well. However, there is and has been planning and preparing in place.
Some fast facts to know about the Arizona water supply - AZ Big Media
Because of the 1980 Groundwater Management Act, Arizona has the legal and physical infrastructure that maintains a 100-year water supply.
www.google.com
Phoenix has a lot to worry about. Housing has outpaced salary growth and inflation by a massive margin for some time now. The statistics are deceptive because of Phoenix metro's huge size but it's pushing much of the population into poverty. 20% of all home sales are also rental investors and I know from first hand knowledge that large investment firms are preparing to scale in on another housing crash.
None of our infrastructure is set up to handle this growth. Neither are our natural spaces. The show Yellowstone is basically what's happening to Phoenix. 83% of Arizona is public parks or forest and it's impossible to enjoy anymore. Any hiking trail, lake, stream, campground, or federal park is overrun and often wrecked by people.
I grew up here and watching this city and the surrounding cities turn into urban shitholes is depressing. Phoenix is a ****ing mess.
Yes, you can use your VA certificate multiple times. Buy with zero down, re-finance (conventional) to free up your certificate and do it again. You will need to save up some cash reserves as banks want to see your ability to make mortgage payments for a few months on each property owned.
Agreed that COVID brought some hardships to both tenants and landlords, but we’re past a lot of that crap now.
The one house I sold, I’ve regretted it. Keep everything and borrow against a property if needed. Good luck.
I did know you could re-use the VA certificate again but wasn't sure if you could buy another home with a VA loan while still keeping your other home purchased with the VA loan. I did some searching and found this. Look on page 4. https://www.benefits.va.gov/HOMELOANS/documents/docs/VA_Buyers_Guide.pdf
I am not seeing any of this out where I am.
I rarely go into the central Phoenix area. When I do, I'm glad I don’t live around there. It really is different from the west valley.
I think I'm in an area that is protected from much of those problems. If I'm wrong and it changes over time, I can always move.
You can't just blame investors. For 5 straight years, Phoenix has been the fastest growing city in the U.S. This contributed to home sales being a sellers market.
This growth also added jobs. Phoenix is second in the top five labor markets in the U.S.
Different views, different perspectives.
That is a good document. Once you buy a home using your VA cert, you can "free up" the certificate by refinancing. I've used my cert 3 or 4 times now.....
Are you retiring from teaching? Are you heading to a place that is cheaper than Vegas? We have been here for 4 years and finally found where we want to be, so in spring 2020 we bought in Green Valley. Paid $525K for the house (4 bd, 3ba, 3100 sqft, pool, 4 car garage, guard gated community, Bartlett/GS/GVHS school zone). House value is now around $725K. Thought about selling and moving back to the midwest with a pile of cash, but we are young (early 40's) with 2 kids in school so don't want to move. I guess it doesn't matter what your home value is if you're not interested in selling! LOL
While we aren't experiencing the same situation as the 07 bubble burst, there are several reasons why I believe the housing market is unsustainable:
1. Low interest rates make higher priced homes more "affordable"; when interest rates increase, home prices will drop.
2. In UT for example, ~52% of residents can't afford the average home price and over 75% of current renters can't afford the average home price; and they keep building new "expensive" homes.
3. Incomes aren't even close to keeping up with inflation which reduces "affordability".
4. Home prices in some areas are exceeding FHA and VA loan limits which account for ~20% of mortgages.
5. Coming up with $100K+ down and carrying a $400K+ mortgage is very challenging for your average buyer / family income.
6. Inventory will catch up to demand and likely over-saturate the market based on 1-5.
1. Low interest rates make higher priced homes more "affordable"; when interest rates increase, home prices will drop.
2. In UT for example, ~52% of residents can't afford the average home price and over 75% of current renters can't afford the average home price; and they keep building new "expensive" homes.
3. Incomes aren't even close to keeping up with inflation which reduces "affordability".
4. Home prices in some areas are exceeding FHA and VA loan limits which account for ~20% of mortgages.
5. Coming up with $100K+ down and carrying a $400K+ mortgage is very challenging for your average buyer / family income.
6. Inventory will catch up to demand and likely over-saturate the market based on 1-5.
We are in the same situation. bought in 08 @ 160k, paid off in 19, we can now sell for 400+ We already startrd the build process in an acerage community. Our house will need to be sold in a few months. We plan to take 500+k to closing and have a very small mortgage.
We are very excited to get into the new place on our 1 acre lot. 30x40 shop will be going up hopefully next year.
We are very excited to get into the new place on our 1 acre lot. 30x40 shop will be going up hopefully next year.
Yes, I retire next May after 30 years.. I'm moving where it is cheaper with more land as well. I'll put my place up for sale next Spring some time. I bought in 2011 so will see a nice profit. Fingers crossed some unforseen economic catastrophe doesn't happen.
At this very moment, 20% of all Phoenix home sales are investors turning rentals so yeah, I can blame them. That's not including the massive percentage of flippers and developers. The state says flipping is down however the state categorizes a flipper as someone that buys a house and relists it on the market in 30 days, most houses are being bought by developers that are ripping houses down and building massively overpriced rebuilds on them that extend past the 30 days. That doesn't include developers that are also subdividing the lots. I put a bid a few years ago for a house and lot at $365k. It sold for $578k cash. The house was then torn down, the lot divided into two, and two houses were build and sold for $1.45 and $1.42 million which drives the surrounding comps through the roof. Those two houses don't count as an investment rental or a flip.
There isn't an area of the valley that isn't overpriced. It can't continue like this.
I'm in the same boat OP, bought in 2019 for 230k, probalby worth 350k right now. Nicest neighborhood in the county by far, on the golf course.
But if I sell right now I 'buy high' as well.
And good luck convincing a woman to go back to an apartment after you've been in a house lolol
soooooo what to do.....
But if I sell right now I 'buy high' as well.
And good luck convincing a woman to go back to an apartment after you've been in a house lolol
soooooo what to do.....
Both me and my wife have VA certs.
Fun times.
Just sold my house in Oklahoma that was a rental since 2009. I wanna move to Florida but it makes no sense to pay the prices right now.
Our current house, no remodel except the garage, appraised for $160k more than we paid in 2015.
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